Message Ven 28 Aoû 2009 21:17

China Puts $768 Million in Zambian Mines Zambia's copperbelt

China Puts $768 Million in Zambian Mines
Zambia's copperbelt. Credit: acidwashtofu
Jinchuan, China Non-Ferrous Metal Invests
By Valentine Chanda August 28th, 2009 - 05:31 am PT

Chinese mining firms have invested about US $768 million in Zambian mines, which has given the country's mining industry a new lease on life.

One mine that has received a shot in the arm from Chinese mining giant Jinchuan Group is the Munali Nickel Mine in Mazabuka, 60 kilometres south of the capital Lusaka.Operations at Munali are expected to start next month after papers are signed.

So far Jinchuan has injected US$7 million as part of the restructuring deal that gives the Chinese firm majority shares in the mine. Jinchuan acquired 51 percent majority shares after buying the debt Albidon Mining Company of Australia owed Barclay's Bank and the European Investment Bank.

Before that Jinchuan Group owned 18.4 percent in the mine while Albidon owned majority shares. The Chinese mining giant is expected to pump in another US$21 million. Munali Nickel Mine closed in March this year because of low metal prices and about 8000 workers lost their jobs.

China Non-ferrous Metal Mining Company (CNFC) acquired Luanshya Copper Mine (LCM) for US $50 million after owners, Enya Holdings BV, pulled out of the mine in January this year citing low copper prices on the international market.

When Enya Holdings pulled out, over 1,600 workers lost their jobs and 67 contractors lost their contracts. After acquiring 85 percent shares in LCM, CNFC has promised to invest over US$400 million and create over 4000 jobs when the company resumes operations at the mine.

CNFC also announced recently that the company is going to construct a state-of-the-art leach plant at a cost of US$300 million at Luanshya mine next year. The leach plant is expected to be one of the biggest in the country. CNFC has so far spent over US$390 million in the recapitalization program at Luanshya mine.

Chinese mining firms are promising long term investment in Zambia. "Our investment in Zambia and in Luanshya aims at long-term development rather than for the profits in a short time. What we value is to make a contribution to the economic cooperation and inheritance of the traditional friendship between China and Zambia," CNFC vice-president Tao Xinghu, who is also Zambia-China Economic and Trade Cooperation Zone President, said.

Tao also promised that despite the global economic crisis and the sharp fall in copper prices on the international market, CNFC will not reduce any investment in Zambia and that the company will not cut on its investment, production and employment levels.

The residents of Luanshya who have suffered two closures at LCM in the last eight years. LCM closed in 2000 over debts former owners Binani Group of India owed to power distribution firm Copperbelt Energy Company (CEC).

CNFC first appeared on the Zambian mining scene in 1998 with the acquisition of Chambeshi mine on the Copperbelt province, situated about 400 kilometres northwest of the capital Lusaka, which had been closed for 13 years.